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Contractors More Optimistic Than Other Small Businesses

Wed May 10, 2006 - National Edition
Construction Equipment Guide

In its first survey directed at small businesses in the construction/contractor industry, the International Profit Associates Small Business Research Board (IPA SBRB) measured and compared overall small business to this important business segment.

The IPA Small Business Confidence Index (IPA SBCI), which measures expectations about revenue growth, the general economy and hiring looking forward 12 months now stands at 47.3 for all small business. In the construction/contractor industry, the IPA SBCI is at 49.3 as compared to 44.6 in the non-construction businesses in this survey.

The construction industry is more optimistic about the general economy for the next year than small business overall. Construction company executives are 23 percent more optimistic than their business peers in the non-construction small business sector. Forty-eight percent of those in construction surveyed felt the general economy will improve compared with 44 percent in overall small business and 39 percent in non-construction industries.

When asked to identify the single most important issue to their businesses, 25 percent of those in construction identified the cost of materials as most important. This compared to 10 percent in non-construction businesses.

Conversely, the cost of energy/fuel was cited by 16 percent in non-construction small business and only 3 percent of construction/contracting businesses.

Finding quality employees is of major concern to many businesses, but a bit less so in construction. Overall, 13 percent indicated finding quality employees is the single most important issue facing them. In construction, 10 percent identified this as the most important issue, while in non-construction small businesses, 16 percent of owners and managers identified this as the top issue.

On the hiring front, construction expects to increase hiring more than general small business. Overall, 39 percent of small businesses expect to increase hiring during the next year. In construction, 43 percent feel they will increase hiring as compared to 34 percent in non-construction industries.

Differences ’Striking’

“The differences in expectations of construction executives versus their peers in other industries is striking,” said Gregg Steinberg, president of International Profit Associates. “Growth in the construction sector, coupled with higher costs for construction materials and hiring pressures, will be watched closely by the Federal Reserve as it determines future interest rate policy for the economy in general.”

The IPA SBRB is expanding its research to specific industry segments. With this release of construction/contracting industry data the IPA SBRB is focusing on the first of many specific industry segments. Looking forward, the IPA Small Business Research Board will provide information which reflects the opinions of both the overall small business community as well as important specific industries that drive the American economy.

About the Survey

The International Profit Associates Small Business Research Board ascertains and reports the opinions of small business owners and managers on a wide variety of topics related to their own businesses as well as national and international issues that may impact their operations.

Participants in the poll provide feedback on significant issues and allow for real-time insight into the state of small businesses nationwide. The universe of participants is developed from among small businesses across the United States.

Approximately 500 small business owners and senior managers participated in this IPA SBRB poll, of which 281 were in the construction/contractor industries. The IPA SBRB study is a voluntary survey conducted via phone and e-mail. The poll was structured and supervised through an independent resource.

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